What About the Contract?

Maynard, 18, was shopping for his first car. With a mere $4,000, he was hoping for a deal. He found a used convertible 1979 Mustang at Pierre’s Awesome Car Place for $5,000. Pierre claimed that the Mustang was “one of a kind” and “the best car in town.” He said “the engine and brakes are in tip-top shape.” Pierre even promised to bring the price down to $4,000, if Maynard agreed to buy it that very day.

Maynard immediately signed an agreement that contained an “as-is” clause and drove off in the car. Two days later, the brakes failed while driving and Maynard crashed into a tree. The front of the car was damaged and Maynard sustained mild injuries. Infuriated, Maynard immediately towed the vehicle back to Pierre’s and confronted him. Pierre shrugged it off, saying, “Too bad, bad brakes or not, you agreed to the “as-is” clause in the contract!”

Now Maynard does not know what to do. He has lost two weeks of work pay due to the injury, a damaged car that cost him $4,000, and physical pain and mental trauma. To make things worse, Maynard discovered the car’s fair market value was actually only $1,500 at the time of the purchase.

Research contract concepts related to formation and defenses to enforcement using your textbook, the Argosy University online library resources, and the Internet. Based on the facts of the case and your research, respond to the following questions:

Was a valid contract formed between Pierre’s and Maynard? Explain. If a valid contract was formed, does Maynard have any arguments to have his money refunded? What are Maynard’s rights under the Uniform Commercial Code (UCC) with respect to the “as-is” agreement he signed? What damages, if any, can Maynard sue Pierre’s for? Discuss any ethical issues concerning Pierre’s behavior.